Abstract:This paper introduces the dynamic airline seat inventory control strategy when the passengers are strategic, and analyzes the dynamic pricing and seat inventory control problem. A multi-period stochastic model is estabished, in which the seats open control and price change are decision variables, and their solutions and corresponding properties are discussed. It is found that the airline can alleviate the impact of the passenger strategic behavior to the expected profit through the seat inventory control strategy. Numerical examples are given to analyze the effect of strategic passenger behavior on the performance of optimal policies, and show that seat inventory control policy can not completely eliminate the passenger strategic behavior, but the higher the supply level or degree of the strategic passengeris, the more effectiveness the seat inventory control strategy has.